Tik Tok launches gift-giving red envelopes. Will big companies stage another red envelope war?

Since WeChat Store updated the gift-giving function, many people think it is a major update comparable to the red envelope update. But now Douyin has also joined the battle and launched a similar function. With the upcoming Spring Festival, will it be a new "red envelope war"?

Following WeChat’s internal testing of the gift-giving function, Douyin is also able to send commodity gifts, and supports sending some products in two major areas, namely local life group buying and e-commerce, to friends.

During the Spring Festival this year, Douyin launched a limited-time event called "Group Buying and Sending as You Like", but based on the current experience, this event has become a new permanent feature of Douyin and has been further improved. Users can send group-buying products to each other in a similar way to "red envelopes", and friends can open the "red envelopes" to use after receiving the product gifts in the chat interface. In addition, products purchased in the Douyin Mall can also be sent to each other in the form of wrapped gifts.

In mid-December, WeChat Stores started grayscale testing of the "Send Gifts" function. According to the official announcement, except for jewelry and education and training, all other categories of WeChat Stores will support the "Send Gifts" function by default as long as the original price does not exceed 10,000 yuan. Since the "package" of the gift will be sent to the other party's chat interface in the form of a blue red envelope cover, it is called "blue envelope" by many netizens and has caused heated discussion.

In today's digital business wave, social elements and e-commerce are closely integrated. WeChat, Douyin and other platforms have keenly captured this trend, quickly laid out a new track for gift giving, and innovatively adopted the popular form of red envelopes to carry and promote this business. This can't help but remind people of the fierce red envelope war between WeChat and Alipay in the past.

At that time, the red envelope war quickly swept the entire Internet, becoming an online carnival feast with high participation and enthusiasm from the whole nation. It profoundly changed the landscape of the payment industry. Like a structural change, it powerfully reshaped the consumption and payment habits of the majority of users that had been formed over a long period of time, leaving a strong mark in the history of business.

Now, big companies are once again eyeing the gift-giving function. Will they replicate the thrilling red envelope battle of that year?

01 Not only WeChat, Douyin also launched the gift-giving "red envelope" function

Similar to WeChat’s “Blue Packet”, Douyin also supports gifted merchandise and is closely tied to Douyin’s social network.

Tech Planet Experience found that the range of goods given away by Douyin is larger than that of WeChat, and supports some products from e-commerce and local life group purchases.

Take the gifting of group-purchased goods as an example. After the user purchases the goods, he will see an option to give it to a friend on the payment result page. After clicking on "Give it to a friend", he will be redirected to the gift packaging editing interface.

Figure: Douyin’s “Send to Friends” entry interface

Users can choose the cover image and blessing words recommended by the system as the product packaging. The blessing words can be manually edited by users, and the number of words cannot exceed 14. Currently, only users with Douyin accounts are supported to send gifts. The gift link can be shared through Douyin or other channels. After the gift packaging is edited, select a Douyin user to send the gift. The platform will notify the user to receive the gift through a private message in the chat interface.

Friends will receive a gift similar to a red envelope in the chat interface. After clicking to receive it, they can get the group purchase package. It should be noted that friends must receive it within 24 hours after the gift is initiated. If it is not received within 24 hours, it will be automatically returned to the order of the sender.

Note: The left side shows the Douyin product red envelope, and the right side shows the WeChat product red envelope

In addition to group-buying products, Douyin's e-commerce products also have a similar friend gifting function. However, instead of sharing to friends in the form of red envelopes, they are shared in the form of express parcels. The other party can see the logistics information of the product, but not the specific product information, which gives a certain sense of surprise.

Figure 1: The display format of gift giving in the Douyin chat interface

In addition, Tech Planet also found that after receiving a gift of merchandise, friends can also choose to choose a gift from the same store as the product to give back to the other party, thereby deepening social interaction.

Figure: Gift package return interface

Moreover, traditional gift-giving methods are often limited to physical gifts, but Douyin's group buying and e-commerce product gifting to friends function breaks this limitation and includes various services such as food, drink, entertainment, and a wealth of e-commerce products into the gift category. Users can choose to send a meal, a movie, a massage service, or a favorite product according to the preferences and needs of their relatives and friends, providing users with more creative and personalized gift-giving options.

An industry insider told Tech Planet that Douyin has a huge user base and strong traffic advantages. After launching the group purchase and product gifting functions, merchants' products and services can be more widely displayed and promoted, attracting more potential customers' attention, thereby increasing sales opportunities. Especially for some local life service merchants, such as catering, entertainment, etc., through group purchases and gifts, more users can be attracted to the store to consume, thereby increasing the store's visibility and popularity.

02 Why does the gift-giving function touch the hearts of the platform and users?

In fact, giving gifts to friends on e-commerce platforms is not a new thing. Earlier, platforms such as Taobao, JD.com, and Meituan have launched the function of sending gifts to friends.

For example, in August 2021, Taobao APP launched a new feature: Send a gift to a loved one. The product can be given to friends. It was revised and upgraded in 2023. This feature is suitable for young people to give gifts to parents who do not know how to shop online, especially food, and can be bought by men, women, young and old.

In order to further improve Taobao's gift-giving function, Cainiao APP has also launched a package encryption service for goods given by Taobao users. It can encrypt the package information to the recipient and add an electronic greeting card to the other party.

Figure: The gift package interface of Cainiao APP

In addition, JD.com, Meituan and other apps have also launched their own gift and coupon sending functions.

However, why did it only attract attention from all parties after WeChat launched the gift-giving function, and even be regarded as the next trend in e-commerce platforms?

On the one hand, WeChat gifting uses a similar gameplay to red envelopes, and through the similarity with WeChat red envelopes, it is easier for users to get started and accept. When a user sends a gift, the recipient will click on the link to view it out of curiosity after receiving the gift red envelope. If they are also tempted to give a gift in return or buy a new gift, they will form a new purchase behavior. This cycle repeats, just like nuclear fission, and spreads rapidly in social networks, allowing the platform's user base to continue to expand, and its popularity and influence to be rapidly improved.

On the other hand, compared with platforms such as Taobao, JD.com, and Meituan, WeChat has a huge and unique social ecosystem, and the social relationships between its users are closer and more frequent. The gift-giving function of WeChat Stores can better utilize this social advantage, deeply integrate social interaction with e-commerce shopping, and make gift-giving a natural social behavior rather than just a shopping function. This will also attract more users and merchants, and the share of WeChat Stores in the e-commerce market is expected to gradually expand.

According to a recent report by the Science and Technology Innovation Board Daily, a relevant person from Three Squirrels told reporters that the WeChat gift-giving function is not only a specific functional innovation, but also a positive signal, indicating that WeChat e-commerce may usher in greater changes in the future.

The above-mentioned Three Squirrels related person revealed to the reporter that Three Squirrels has set up 3 stores on the video account, with a total of 10 matrix accounts, and the company also paid attention to the WeChat gift-giving function at the first time. After the internal test on December 19, the single-day transaction and new customer acquisition of the Three Squirrels WeChat store official store account increased by more than 500% month-on-month, and the average increase in the matrix account dimension also exceeded 10%.

Influenced by the gift-giving function of WeChat Stores, the capital market is also optimistic about the commercial prospects of this function. On December 25, in the Hong Kong stock market, the share prices of Weimob Group and Youzan rose sharply, with Weimob Group rising 31.05% and Youzan rising 11.59%. In the A-share market, stocks such as Three Squirrels, Meideng Technology, Tiandi Online, and Qingmu Technology also rose, showing the market's optimistic expectations for the future development prospects of WeChat Stores.

03 A new “red envelope” war may stir up trouble again

With the launch of the "send gift" function similar to the red envelope gameplay by Douyin and WeChat, it is possible to change the existing competitive landscape.

The red envelope war of that year is still fresh in people's memory. In 2014, WeChat and Alipay launched red envelope games during the Spring Festival, also known as the "red envelope war", during which almost all users of the platform were mobilized to participate. Subsequently, this game was maintained. During the Spring Festival every year, Internet platforms such as Baidu, JD.com, ByteDance, and Kuaishou also invested a lot of money, and even spent a lot of money to sponsor CCTV Spring Festival Gala red envelopes.

The main reason why red envelopes are so important to all parties is that they are an efficient social medium. Users not only send red envelopes to their familiar friends and relatives, but also interact with unfamiliar people through red envelopes, allowing the platform to attract new social relationships and accumulate users.

Moreover, through large-scale red envelope distribution activities, the platform can gain extremely high exposure in a short period of time. For example, during the "Wufu Collection" activity, Alipay's brand logo frequently appeared in various media and on users' mobile phone screens.

This time, the "red envelopes" launched by WeChat and Douyin for giving away commodity gifts also have a powerful social fission effect.

This unique gameplay based on social e-commerce may directly challenge the shopping methods of traditional e-commerce platforms, making the competition in the e-commerce industry more diversified and fierce. Because WeChat, Douyin and other platforms can attract more users and merchants and seize market share by virtue of their social advantages in giving gifts.

"For large e-commerce platforms, they have to pay attention to this emerging competitive force, which may accelerate their layout and innovation in the field of social e-commerce," Xiao Lin, a former Taobao product manager, analyzed to Tech Planet.

For example, traditional e-commerce giants such as Taobao and JD.com are likely to launch similar "red envelope" functions for giving away gifts of goods, and increase investment in social interaction functions and personalized recommendations, to strengthen social connections between users and enhance users' shopping experience, thereby maintaining their own market competitiveness.

The entire e-commerce industry will continue to evolve in this competition and change, forming a new pattern. Consumers will also benefit from it and enjoy better, more convenient and diversified shopping services.

Text | Chen Qiaohui This article is written by the author of Operation Party [Tech Planet], WeChat public account: [Tech Planet], original/authorized to be published on Operation Party, and any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.